Senate Ponders CSPI Plan To Tax Sugared Drinks, Hears Objections

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WASHINGTON -- U.S. Senate leaders are weighing a new tax on soda and other sugar-sweetened beverages to help fund a comprehensive overhaul of the nation's healthcare system. President Obama's administration reportedly has allocated funds for only half of the $1.2 trillion cost of the healthcare system overhaul that he wants to enact this year.

The Senate Finance Committee heard proposals this week from experts who proposed potential sources of additional funds. Among them was health and nutrition advocacy group The Center for Science in the Public Interest, which proposed a federal excise tax on non-diet soda and other sweetened beverages. These would include sports drinks, energy drinks, some fruit drinks and ready-to-drink teas. The impost would be levied on the beverage producers and passed on to consumers in the form of higher prices.

"Because soft drinks have been a major contributor to obesity in recent decades, and because obesity is a major cause of diabetes, hypertension, strokes, heart attacks and cancer, Congress should impose a new excise tax on non-diet soft drinks, including both carbonated and noncarbonated beverages," testified CSPI executive director Dr. Michael F. Jacobson.

American Beverage Association officials objected to this proposed tax, and called the Committee's attention to the beverage industry's national School Beverage Guidelines. These were developed in cooperation with the Alliance for a Healthier Generation, a joint initiative of the William J. Clinton Foundation and the American Heart Association. The industry committed to removing full-calorie soft drinks in schools across America, as well as capping caloric content and reducing portion sizes of other beverages and providing nutritious beverage options by the beginning of the 2009-2010 school year. At the start of the current school year, nearly 80% of America's schools under contract were in compliance with the guidelines, according to ABA, and calories from beverages in schools have been cut by 58% during that time.

"Together as a society, we need to focus on the hard work of teaching our children how to balance calories consumed with calories burned and, by doing so, give them the skills to maintain a healthy weight throughout their lives," said ABA president and chief executive Susan Neely. "A tax won't teach children these skills or have a lasting, meaningful impact on reducing childhood obesity. The School Beverage Guidelines are the right policy that strikes the right balance. It's why the guidelines have drawn strong support from parents, educators, doctors and nutritionists."

Former President Clinton told ABC News that he does not favor a tax on soda to pay for healthcare reform. "I'm doing everything I can on this obesity thing," he said. "I think the better thing to do is to give incentives right across the board for prevention and wellness. That's what I would do."

In November, voters in Maine repealed a tax on soda that had been approved by the state legislature. Earlier this year, New York Gov. David Paterson abandoned a proposed 18¢ tax on soft drinks after encountering fierce opposition from industry and consumer groups. Only two states -- Arkansas and West Virginia -- currently tax soft drinks.